Each month we'll post a FAQ (frequently asked question) from the current 2012-2013 USPAP book.
QUESTION: What is the difference between a client and an intended user?
RESPONSE: The term client is defined in the definitions section as:
The party or parties who engage, by employment or contract, an appraiser in a specific assignment.
Intended users are identified by the appraiser through communication with client and are not established based on who might receive or use the report.
The definition of intended user has a specific meaning in USPAP. In the context of the USPAP definition of intended user, the fact that the IRS, the court, an independent auditor, or others will use your report for review, audit, or other purposes does not automatically make them intended users. These parties receive the report through established processes of disclosure or regulation.
One way to understand the concept is to think about what the intended use is for each party. The appraiser must identify both the intended users and the intended use of the appraisal, because these two factors affect many aspects of the appraisal assignment, such as the appropriate scope of work and the appropriate type of report.
As indicated in Statement on Appraisal Standards No. 9 (SMT-9), Identification of Intended Use and Intended User:
Parties who receive a copy of an appraisal, appraisal review, or appraisal consulting report as a consequence of disclosure requirements applicable to an appraiser's client do not become intended users of the report unless they were specifically identified by the appraiser at the time of the assignment.
source: nebb institute